Harding v. Wealands [2006] UKHL 32 House of Lords HL Lord

Harding v. Wealands
[2006] UKHL 32
House of Lords
HL
Lord Bingham of Cornhill, Lord Woolf, Lord Hoffmann,
Lord Rodger of Earlsferry
and Lord Carswell
2006 May 2, 3, 4; July 5
The claimant, an Englishman, was rendered tetraplegic following an accident in a
vehicle driven by the defendant, an Australian national, which occurred in New
South Wales. The claimant issued and served proceedings seeking damages for
personal injuries on the defendant in England where she was working. The
defendant contended that the law of New South Wales applied to the
assessment of damages and relied on certain provisions of the Motor Accidents
Compensation Act 1999 of New South Wales which imposed restrictions on the
amount of damages which could be recovered. The preliminary issue arose as to
what was the law applicable to the quantification of damages. The judge held,
inter alia, that the provisions of the Motor Accidents Compensation Act 1999
concerning the assessment of damages were procedural rather than substantive
and consequently, pursuant to section 14(3)(b) of the Private International Law
(Miscellaneous Provisions) Act 1995 [FN1], English law would apply to them. The
Court of Appeal reversed his decision.
APPEAL from the Court of Appeal
This was an appeal by the claimant, Giles Christian Harding, brought with leave
of the Court of Appeal, from a decision of the Court of Appeal (Arden LJ and Sir
William Aldous; Waller LJ dissenting), dated 17 December 2004, allowing an
appeal by the defendant, Tania Wealands, from a decision of Elias J given on 27
May 2004, in determining a preliminary issue in favour of the claimant that the
law applicable to the quantification of damages of the claimant's claim was the
law of England rather than the law of New South Wales.
5 July. LORD BINGHAM OF CORNHILL
1 My Lords, I am in full agreement with the opinions of my noble and learned
friends, Lord Hoffmann and Lord Rodger of Earlsferry, which I have had the
advantage of reading in draft. For the reasons which they give, I also would allow
the appeal and restore the order of Elias J.
LORD WOOLF
2 My Lords, I am able to confine my opinion to a single issue because I agree
with the opinions of Lord Hoffmann and Lord Rodger of Earlsferry, which I have
read in draft.
3 I have also had the advantage of reading the opinion of Lord Carswell in
draft. While Lord Carswell agrees with Lord Hoffmann's and Lord Rodger's
"reasons" and "conclusions", he does so subject to "one slight qualification": para
79.
4 Lord Carswell makes his qualification because of his understanding of what
is the natural meaning of the word "procedure": para 83. As to this, *86 Lord
Carswell is in agreement with the judgments of Arden LJ and Sir William Aldous
in the Court of Appeal. Arden LJ accepted that "damages are not naturally
regarded as procedure" (para 58) and Sir William suggests that the natural
meaning of "procedure" is "the mode or rules used to govern and regulate the
conduct of the court's proceedings": para 86. Lord Carswell adds, however, that
in the field of private international law the word "procedure" has a "special
meaning" which is wider than that which might be regarded as "natural".
5 Lord Carswell, having adopted this approach to the natural meaning of
procedure, treats the "special meaning" as justifying reliance on Pepper v Hart
[1993] AC 593 to resolve the significant issue of construction at the heart of this
appeal.
6 I am in agreement with Lord Carswell that, if it is necessary to rely on
Pepper v Hart to decide the meaning of "procedure" in section 14(3)(b) of the
Private International Law (Miscellaneous Provisions) Act 1995, the evidence of
what was said in Parliament by the then Lord Chancellor conclusively resolves
this issue in the claimant's favour. Lord Carswell rightly points out that this is an
outstanding example of a case where the evidence as to what was said during
the passage of the legislation through the parliamentary process makes it
abundantly clear that it was the intention of Parliament by enacting section
14(3)(b) that the law of this country and not that of New South Wales is to be
applied by the courts of this jurisdiction to the calculation of the claimant's
damages. This is despite the fact that the claimant's accident occurred and his
injuries were caused as the result of negligence of the defendant in New South
Wales.
7 However, I unfortunately differ from Lord Carswell as to his reasoning for
relying on Pepper v Hart. The word "procedure" is frequently used in contrast to
"substance" in order to distinguish between questions of procedural law and
substantive law. Thus, unsurprisingly it is used together with the word "practice"
in this context in section 1 of and Schedule 1 to the Civil Procedure Act 1997 to
identify the scope of the Civil Procedure Rules. The scope of the language is
wide enough to encompass the contents of a civil procedure code which deals
with evidence and remedies.
8 In determining the meaning of the word "procedure" the context in which the
word is being used is of the greatest significance. In section 14(3)(b) "procedure"
is used in conjunction with "rules of evidence, pleading or practice". In that
context it is natural to regard the assessment of damages as being a matter of
procedure rather than substance.
9 The fact that the present context is one in the field of conflicts of law does
not mean that "procedure" is being used in a special sense rather than in the
sense in which you would expect it to be used having regard to the context in
which it appears. It makes good practical sense to draw a distinction between the
treatment of questions of procedure and questions of substance; the former to be
dealt, as you would expect in accordance with the procedure normally applied by
the court in which the proceedings are brought.
10 This does not however mean that a cap on the amount of damages is
obviously a question of procedure rather than a question of substance and if I
had been left in doubt as to the correct answer I would certainly have been
prepared to apply Pepper v Hart [1993] AC 593.
11 *87 The limits on the amount of damages on which the defendant seeks to
rely are contained in the Motor Accidents Compensation Act 1999 of New South
Wales. That Act contains in Chapters 3, 4, 5 and 6 a detailed statutory
procedural code containing the machinery for recovering compensation for motor
accident injuries, including the way damages are to be assessed. The code is
clearly one that has provisions which it would be very difficult, if not impossible,
to apply in proceedings brought in this country, even though they may be capable
of being applied in other parts of Australia. To have different parts of that code
dealt with by different systems of law would not be an attractive result and in
some cases this would produce an impractical result. (See for example section
132 which requires, in the case of a dispute over non economic loss, for the
degree of impairment to be assessed by a medical assessor in New South
Wales.) The greater part of the code is clearly procedural and those parts which
could be arguably regarded as substantive should be treated as being procedural
as well.
12 For these reasons, as well as those given by Lord Hoffmann and Lord
Rodger, I would allow this appeal and restore the judgment of Elias J.
LORD HOFFMANN
13 My Lords, the issue is whether damages for personal injury caused by
negligent driving in New South Wales should be calculated according to the
applicable law selected in accordance with Part III of the Private International
Law (Miscellaneous Provisions) Act 1995 ("Part III") or whether it is a question of
procedure which falls to be determined in accordance with English law. The
Court of Appeal, by a majority (Arden LJ and Sir William Aldous, Waller LJ
dissenting) held that it should be determined in accordance with the applicable
law, which they decided was the law of New South Wales. In my opinion the
dissenting opinion of Waller LJ was correct and the question is one of procedure
governed by the law of the forum. I also agree with the speech to be delivered by
my noble and learned friend, Lord Rodger of Earlsferry, which I have had the
advantage of reading in draft.
14 The accident happened on 3 February 2002 on a dirt track near Huskisson
in New South Wales, when the defendant Ms Wealands lost control of the vehicle
she was driving and it turned over. Negligence is admitted. The claimant Mr
Harding, who was a passenger, was severely injured and is now tetraplegic. Mr
Harding is English and Ms Wealands Australian. They had formed a relationship
when Mr Harding visited Australia in March 2001 and in consequence Ms
Wealands had come to England in June 2001 to live with Mr Harding. At the time
of the accident they had gone together to Australia for a holiday and a visit to Ms
Wealands's parents. The vehicle belonged to Ms Wealands and she was insured
with an Australian insurance company. After the accident, Mr Harding and Ms
Wealands returned to England.
15 The action was tried by Elias J, who applied English law to the
assessment of damages for two reasons. First, because the assessment of
damages was a matter of procedure governed by the lex fori and secondly,
because even if it was a matter of substantive law, it was in this case
"substantially more appropriate" to apply English law: see section 12 of Part III.
The Court of Appeal, as I have said, allowed the appeal on the first *88 point by a
majority and allowed it unanimously on the second. I shall first address the
question of substance and procedure.
16 Personal injury caused by negligence is an actionable wrong in Australian
common law. In New South Wales, common law liability for transport accidents
was briefly abolished by the Transport Accidents Compensation Act 1987 (NSW)
and a statutory scheme of compensation substituted but the Motor Accidents Act
1988 (NSW) repealed the 1987 Act and section 6 reinstated the common law:
"The law relating to a right to or a claim for damages or compensation or any
other benefit (pecuniary or non-pecuniary) against any person for or in respect of
the death of or bodily injury to a person caused by or arising out of a transport
accident... shall be as if the [1987 Act] had not been passed and the common law
and the enacted law (except that Act) shall have effect accordingly."
17 The 1988 Act did however contain detailed provisions concerning awards
of damages for injuries suffered in motor accidents. These have been replaced
by Chapter 5 of the Motor Accidents Compensation Act 1999 ("MACA"), which
was in force at the time of the accident. Section 123 provides that "a court cannot
award damages to a person in respect of a motor accident contrary to this
Chapter". The provisions of Chapter 5 which would have been relevant to an
award of damages by a court in New South Wales are: (a) the mnaximum
recoverable for non-economic loss (pain and suffering, loss of amenities of life,
loss of expectation of life, disfigurement) is AUS$309,000 subject to indexation
(section 134); (b) in assessing loss of earnings, an excess of net weekly earnings
over AUS$2,500 must be disregarded (section 125); (c) there is no award for the
loss of the first five days of earning capacity (section 124); (d) no award may be
made for gratuitous care which does not exceed six hours a week and is for less
than six months and the amount recoverable for care exceeding these minima is
limited to sums specified in section 128; (e) the discount rate for calculating the
present value of future economic loss is prescribed as 5% (section 127); (f) credit
must be given for payments made to the claimant by "an insurer" (section 130);
(g) no interest is payable on damages for gratuitous care or non-economic loss
and entitlement to interest on other damages is subject to conditions, principally
relating to the timely provision of information by the claimant: section 137.
18 None of these provisions forms part of English law. Perhaps the most
striking difference is the 5% discount rate, compared with the 2.5% rate set by
the Lord Chancellor under the Damages (Personal Injury) Order 2001 (SI
2001/2301) pursuant to his power under section 1 of the Damages Act 1996 as
the rate appropriate to ensure that the claimant is fully compensated. The
claimant says that under the provisions of MACA he would recover about 30%
less than he would under English law.
19 Until Part III was enacted, the English common law rule for determining
whether damage caused by acts committed abroad was actionable in tort was
that laid down by the Court of Exchequer Chamber in Phillips v Eyre (1870) LR 6
QB 1, 28-29:
"As a general rule, in order to found a suit in England for a wrong alleged to
have been committed abroad, two conditions must be fulfilled. *89 First, the
wrong must be of such a character that it would have been actionable if
committed in England... Secondly, the act must not have been justifiable by the
law of the place where it was done."
20 I observe in passing that, since the common law of Australia is on this
point the same as the law of England, there is no doubt that the damage suffered
by Mr Harding would have satisfied this double actionability test. But Willes J,
giving the judgment of the court, went on to say: "the law is clear that, if the
foreign law touches only the remedy or procedure for enforcing the obligation...
such law is no bar to an action in this country."
21 What distinction was Willes J seeking to draw by saying that the foreign
law would not affect an action in this country if it touched "only the remedy or
procedure"? He referred to Huber v Steiner (1835) 2 Bing NC 202, which
concerned an action brought in 1835 on a French promissory note made in 1813
and payable in 1817. The defendant pleaded that by French law an action upon
the note was prescribed but Tindal CJ held that, upon its true construction, the
French law did not extinguish the debt but only barred the creditor from obtaining
a remedy. It was therefore a matter of French procedure which an English court
would disregard. Conversely, Don v Lippmann (1837) 5 Cl & Fin 1 was an action
brought in Scotland in 1829 on two French bills of exchange accepted in 1810.
The House of Lords held the defendant entitled to rely on the Scottish six-year
period of prescription because, as Lord Brougham said, at p 13: "whatever
relates to the remedy to be enforced, must be determined by the lex fori, the law
of the country to the tribunals of which appeal is made."
22 Lord Brougham in turn referred to De la Vega v Vianna (1830) 1 B & Ad
284 in which the plaintiff, a Spaniard, had the defendant, a Portuguese, arrested
in England for non-payment of a debt contracted in Portugal. The defendant
claimed to be released on the ground that in Portugal imprisonment for debt had
been abolished in 1774. Lord Tenterden CJ, at p 288, was unmoved:
"A person suing in this country must take the law as he finds it; he cannot, by
virtue of any regulation in his own country, enjoy greater advantages than other
suitors here, and he ought not therefore to be deprived of any superior
advantage which the law of this country may confer. He is to have the same
rights which all the subjects of this kingdom are entitled to."
23 An even earlier case touching upon the same distinction between the
cause of action and the remedy is Robinson v Bland (1760) 2 Burr 1077, an
action upon a bill of exchange given in Paris in payment of gaming debts. By
English law the debt was unenforceable but the plaintiff alleged that in France the
debt could be enforced in a Court of Honour. Wilmot J said, at p 1084: "... I
cannot help thinking, that where a person appeals to the law of England, he must
take his remedy according to the law of England, to which he has appealed."
24 In applying this distinction to actions in tort, the courts have distinguished
between the kind of damage which constitutes an actionable injury and the
assessment of compensation (i e damages) for the injury which has been held to
be actionable. The identification of actionable damage is an *90 integral part of
the rules which determine liability. As I have previously had occasion to say, it
makes no sense simply to say that someone is liable in tort. He must be liable for
something and the rules which determine what he is liable for are inseparable
from the rules which determine the conduct which gives rise to liability. Thus the
rules which exclude damage from the scope of liability on the grounds that it
does not fall within the ambit of the liability rule or does not have the prescribed
causal connection with the wrongful act, or which require that the damage should
have been reasonably foreseeable, are all rules which determine whether there
is liability for the damage in question. On the other hand, whether the claimant is
awarded money damages (and if so, how much) or, for example, restitution in
kind, is a question of remedy.
25 This was the distinction made by the House of Lords in Boys v Chaplin
[1971] AC 356, in which the plaintiff had been injured in a traffic accident in
Malta. By the law of Malta, non-economic damage (pain and suffering, loss of
amenity) was not actionable. Only financial loss was compensatable. The plaintiff
brought proceedings in England and one of the questions raised by the appeal
was whether the rule excluding liability for non-economic damage was part of the
substantive law of Malta or concerned only the remedies which a Maltese court
could provide.
26 Lord Hodson, Lord Wilberforce and Lord Pearson agreed that the rule was
part of the substantive law of tort liability. In Malta, causing non-economic
damage was not an injuria; not an actionable wrong. Lord Hodson said, at p 379:
"questions such as whether loss of earning capacity or pain and suffering are
admissible heads of damage must be questions of substantive law. The law
relating to damages is partly procedural and partly substantive, the actual
quantification under the relevant heads being procedural only."
27 Lord Wilberforce said, at p 389:
"The broad principle should surely be that a person should not be permitted to
claim in England in respect of a matter for which civil liability does not exist, or is
excluded, under the law of the place where the wrong was committed. This nonexistence of exclusion may be for a variety of reasons and it would be unwise to
attempt a generalisation relevant to the variety of possible wrongs. But in relation
to claims for personal injuries one may say that provisions of the lex delicti,
denying, or limiting, or qualifying recovery of damages because of some
relationship of the defendant to the plaintiff, or in respect of some interest of the
plaintiff (such as loss of consortium) or some head of damage (such as pain and
suffering) should be given effect to."
28 Lord Pearson said, at p 394:
"If the difference between the English law and the Maltese law could be
regarded only as a difference of procedural (or adjectival or non-substantive) law,
there would be an easy solution of the problem in this appeal. On that basis the
nature and extent of the remedy would be matters of procedural law regulated by
the lex fori, which is English, and the proper remedy for the plaintiff in this case
according to English *91 law would be that he should recover damages for all the
relevant consequences of the accident, including pain and suffering as well as
pecuniary expense and loss... But I am not convinced that the difference
between the English law and the Maltese law can reasonably be regarded as
only a difference of procedural law. There is a radical difference in the cause of
action, the right of action, the jus actionis. A claim to be reimbursed or
indemnified or compensated for actual economic loss is substantially different in
character from a claim for damages for all the relevant consequences of the
accident to the plaintiff, including pain and suffering. If an accident caused no
economic loss, but only pain and suffering, there would be a cause of action
according to English law, but not according to Maltese law. Surely that must be a
matter of substantive law."
29 On the other hand, Lord Guest said, at p 382, that
"It would not be correct, in my view, to talk of compensation for pain and
suffering as a head of damage apart from patrimonial loss. It is merely an
element in the quantification of the total compensation"
and Lord Donovan said, at p 383, that once the claim was actionable in an
English court, "it was right that it should award its own remedies".
30 Thus the majority held that the Maltese law denying liability for noneconomic damage was substantive law to be governed by the lex causae while
the minority thought that it was a matter of remedy to be governed by the lex fori.
All of them agreed that the quantification of the damages to be awarded for
actionable heads of damage was a question of remedy or procedure.
31 The next question is whether this distinction between questions of liability
and questions of remedy or procedure was affected by Part III. Section 10
abolishes the Phillips v Eyre LR 6 QB 1 requirement of double actionability "for
the purpose of determining whether a tort or delict is actionable" and the common
law exceptions to that rule created by cases like Boys v Chaplin [1971] AC 356
and Red Sea Insurance Co Ltd v Bouygues SA [1995] 1 AC 190. Section 11
substitutes a "general rule" that the applicable law is the "law of the country in
which the events constituting the tort or delict in question occur". Section 12
provides for displacement of the general rule in certain cases in which it is
"substantially more appropriate" for the applicable law to be different. This was
the provision applied by Elias J on his alternative hypothesis that the MACA
restrictions were substantive. But section 14 provides:
"(2) Nothing in this Part affects any rules of law (including rules of private
international law) except those abolished by section 10 above.
(3) Without prejudice to the generality of subsection (2) above, nothing in this
Part...
(b) affects any rules of evidence, pleading or practice or authorises questions
of procedure in any proceedings to be determined otherwise than in accordance
with the law of the forum."
32 It will be noticed that whereas the older cases spoke of questions of
"remedy" being governed by the lex fori and Willes J in Phillips v Eyre LR 6 QB 1,
29 spoke of "remedy or procedure", section 14(3)(b) refers only to "procedure".
Does that mean that the old rule that remedies were a *92 matter for the lex fori
was to be abolished and the rule preserved only so far as it related to questions
which could strictly speaking be regarded as procedure? In my opinion this would
be absurd. In this context, the terms "remedy" and "procedure" had been
regularly used interchangeably. Thus in Boys v Chaplin [1971] AC 356, 378 Lord
Hodson said: "the nature of a plaintiff's remedy is a matter of procedure to be
determined by the lex fori. This includes the quantification of damages." Lord
Guest, at p 381, posed the question as:
"Assuming that the conduct was actionable in Malta, what law is to be applied
to the ascertainment of the damages? Is it to be the substantive law, the law of
Malta, or is to be the procedural law which is the lex fori?"
33 Furthermore, section 14(3) is expressed to be without prejudice to the
generality of section 14(2), which says that nothing in Part III is to affect any rules
of law except those abolished by section 10. Section 10 is concerned with the
rules which determine "whether a tort... is actionable" and not with the rules
concerning the remedies available for actionable injury.
34 The conclusion that the amount of damages for an injury actionable by the
lex causae must be determined according to the lex fori was to be left untouched
is confirmed by the Report of the Law Commission and the Scottish Law
Commission (Private International Law: Choice of Law in Tort and Delict (Law
Com No 193, Scot Law Com No 129)), published in 1990, on which Part III was
based. Paragraph 3.38 dealt with damages:
"The consultation paper [Law Commission Working Paper No 87 and Scottish
Law Commission Consultative Memorandum No 62, which had been published in
1984] provisionally recommended that there should be no change in the present
law on the question of damages, which we confirm. Accordingly, the applicable
law in tort or delict determines the question of the availability of particular heads
of damages whereas the measure or quantification of damages under those
heads is governed by the lex fori."
35 There are several statements in the consultation paper to the same effect,
which it is unnecessary to cite.
36 Mr Haddon-Cave, who appeared for the claimant, said that if the House
thought that the language of section 14(2),(3) was ambiguous or obscure, it
should resolve the ambiguity by reference to a statement made in Parliament by
the Lord Chancellor during the passage of the Bill. For my part, I do not think that
there is any ambiguity or obscurity. Of course, taken out of context, the word
"procedure" is ambiguous. In its narrow and perhaps most usual sense it means,
as La Forest J expressed it in Tolofson v Jensen [1994] 3 SCR 1022, 1072 those
rules which "make the machinery of the forum court run smoothly as
distinguished from those determinative of the rights of both parties". Or it can
have a wider meaning which embraces what Mason CJ in Stevens v Head
(1993) 176 CLR 433, 445 called "the traditional equation drawn between matters
relating to a remedy and matters of procedure". This is the sense it which the
term has always been used in English private international law. If section 14 is
read in its context, against the background of the existing rules of common law
and the report *93 of the Law Commission, there can be no doubt that the latter
meaning was intended. For my part, therefore, I see no need for Mr HaddonCave to resort to Hansard.
37 If, however, there had been any ambiguity which needed to be resolved, I
am bound to say that this is as clear a case within the principle stated in Pepper
v Hart [1993] AC 593 as anyone could hope to find. At the Report stage in the
House of Lords, Lord Howie of Troon put down an amendment to add a further
paragraph to what is now section 14(3), so that it would read: "[nothing in this
Part] (d) authorises any court of the forum to award damages other than in
accordance with the law of the forum." Lord Howie declared an interest on behalf
of Cape Industries plc, which had a few years earlier been sued in Texas for
asbestos-related injuries (see Adams v Cape Industries plc [1990] Ch 433) and
was anxious that Part III should not import American scales of compensation into
English courts. In the debate on 27 March 1995 Lord Mackay of Clashfern LC
made what was obviously a carefully prepared statement:
"With regard to damages, issues relating to the quantum or measure of
damages are at present and will continue under Part III to be governed by the
law of the forum; in other words, by the law of one of the three jurisdictions in the
United Kingdom. Issues of this kind are regarded as procedural and, as such, are
covered by clause 14(3)(b). It follows from this that the kind of awards to which
the noble Lord referred of damages made in certain states, in particular in parts
of the United States, will not become a feature of our legal system by virtue of
Part III. Our courts will continue to apply our own rules on quantum of damages
even in the context of a tort case where the court decides that the 'applicable law'
should be some foreign system of law so far as concerns the merits of the claim.
Some aspects of the law of damages are not regarded as procedural and, in
accordance with the views of the Law Commissions in their report on the subject,
Part III does not alter this. These aspects concern so-called 'heads of damages'the basic matter which is being compensated for-such as special damage
relating to direct financial loss. Whether a particular legal system permits such a
head of damage is not regarded as procedural but substantive and therefore not
automatically subject to the law of the forum. This seems right given the intimate
connection between such a concept and the particular nature of the case in
issue. But again, I foresee no significant increase in awards of damages because
a particular head of damage permitted by some foreign system of law would
continue, so far as the quantum allocated to it in any finding is concerned, to be
regulated by our own domestic law of damages. I hope the noble Lord will feel
reassured..."
38 Lord Howie declared himself reassured and did not move his amendment.
The Lord Chancellor's statement clearly satisfied the requirements of being (a)
clear and (b) made by the minister promoting the bill: see Hansard (HL Debates)
27 March 1995, cols 1421-1422.
39 My Lords, the next question is whether the provisions of MACA to which I
have referred should be characterised as relating to the actionability of the
economic and non-economic damage suffered by Mr Harding or to the remedies
which the courts of New South Wales provide for such damage. *94 On this point
we could not have better authority than that of the High Court of Australia in
Stevens v Head 176 CLR 433. The majority (Brennan, Dawson, Toohey and
McHugh JJ) analysed the equivalent damages-limitation provisions of the Motor
Accidents Act 1988, at pp 454-460, and concluded that they were concerned with
quantification rather than heads of damage. Although MACA is more restrictive of
the court's power to award damages than the 1988 Act, the character of the
relevant provisions is in my opinion the same. Thus, at p 459, the majority said of
section 79(3) of the 1988 Act, which provided that the maximum amount ("only in
a most extreme case") which might be awarded for non-economic loss was
AUS$180,000:
"[It] is plainly a provision which affects the measure of damages but does not
touch the heads of liability in respect of which damages might be awarded. It is
simply a law relating to the quantification of damages and that, as we have seen,
is a matter governed solely by the lex fori."
40 These extracts are from the opinion of the majority. But there is nothing in
the dissenting judgments by Mason CJ and Deane and Gaudron JJ to suggest
that, if they had accepted that the court should apply the traditional distinction
between actionability and remedy, including quantification of damages, they
would have disagreed with the way the majority characterised the provisions of
the 1988 Act. It was the traditional distinction itself which the minority rejected.
Thus Mason CJ, at p 445, proposed that the court should adopt:
"a new criterion for the substance-procedure distinction which... characterise
[s] as procedural 'those rules which are directed to governing or regulating the
mode or conduct of court proceedings'. All other provisions or rules are to be
classified as substantive."
41 Deane J likewise said, at p 462, that the lex fori should be applied "only to
the extent that it was procedural in the narrow sense of being directed to
regulating court proceedings in that state" and Gaudron J adopted the same test:
see pp 469-470.
42 In principle, therefore, I think that the relevant provisions of MACA should
be characterised as procedural and therefore inapplicable by an English court.
But Mr Palmer, who appeared for the defendant, submitted that in English private
international law a limit or "cap" on the damages recoverable is regarded as
substantive. There is, it is true, some authority for this proposition. The 7th
edition (1958) of Dicey's Conflict of Laws, 7th ed (1958), edited by Dr JHC
Morris, contained the statement, at p 1092, "statutory provisions limiting a
defendant's liability are prima facie substantive; but the true construction of the
statute may negative this view" with a footnote: "This is suggested by two dicta in
Cope v Doherty (1858) 4 K & J 367, 384- 385 and (1858) 2 De G & J 614, 626."
43 Cope v Doherty concerned an application by the owners of an American
ship which had collided with and sunk another American ship to limit its liability
pursuant to section 504 of the Merchant Shipping Act 1854 (17 & 18 Vict c 104).
Page Wood V-C held that the section did not apply to collisions between
foreigners. The owners argued that the limitation rule was procedural and should
therefore be applied as part of the lex fori. *95 I should have thought that the
short answer was that whether the rule was substantive or procedural,
Parliament had said that it should not apply to foreigners and that was the end of
the matter. But Page Wood V-C dealt with the argument on its own terms, 4 K &
J 367, 384-385:
"clearly an Act, which limits the damage to which the ship owner is to be liable
under circumstances like the present, deals with the substance and not the form
of the procedure. It in effect forms a contract, that, whereas by the natural law,
the owner of the ship or property that has been injured would be entitled to
damages to the full extent of the loss he has sustained, all those persons upon
whom the legislature can impose such a contract, that is to say, all its own
subjects, shall forego that which the natural law-the common law, as we should
call it in England-would give them, and shall be entitled only to the amount of the
value of the ship by which the injury has been inflicted, and of the freight due or
to grow due in respect of such ship during the voyage."
44 Thus his reasoning was that the statute operates as if it imposed a
contractual term limiting the damages recoverable. In fact, one of the reasons
why the Page Wood V-C held that the statute did not apply to foreigners was that
he thought that, as a matter of international law, the United Kingdom could only
impose such a deemed contract upon British ships. Such a term in a contract
would clearly be a modification of the substantive obligations of the parties. As
Lord Diplock said in Photo Production Ltd v Securicor Transport Ltd [1980] AC
827, 849:
"The contract... is just as much the source of secondary obligations as it is of
primary obligations; and like primary obligations that are implied by law,
secondary obligations too can be modified by agreement between the parties."
45 When Cope v Doherty went to the Court of Appeal, Turner LJ dealt with
the point very briefly (1858) 2 De G & J 614, 626:
"An attempt was made on the part of the appellants to bring this case within
Don v Lippman and cases of that class, but I think those cases have no bearing
upon the point. This is a question of liability, and not of procedure."
46 In my opinion the proposition in Dicey was too widely stated. Cope v
Doherty is authority for the proposition that a contractual term which limits the
obligation to pay damages for a breach of contract or a tort, or a statutory
provision which is deemed to operate as such a term, qualifies the substantive
obligation. It is not part of the rules of the lex fori for the assessment of damages.
I therefore agree with the opinion of Street CJ in Allan J Panozza & Co Pty Ltd v
Allied Interstate (Qld) Pty Ltd [1976] 2 NSWLR 192, 196- 197 that a statutory
limitation on damages deemed to be incorporated into a contract of carriage is
"an express limitation upon the substantive liabilities". But, as the majority said in
Stevens v Head 176 CLR 433, 458:
"Where the sources of the rights and obligations of contracting parties are in
part the express terms of the contract and in part the provisions of its proper law,
the courts of the forum are constrained to ascertain the *96 parties' rights and
obligations from those sources, not from the lex fori. In our respectful opinion,
there is no valid analogy between the rules for determining the contractual rights
and obligations arising in part from the proper law of the contract and the conflict
of law rules governing the assessment of damages in respect of extraterritorial
torts."
47 The Merchant Shipping Act Amendment Act 1862 (25 & 26 Vict c 63)
extended the right to limit liability to all ships of whatever nation and thereafter it
became impossible to regard such a provision as equivalent to a contractual term
imposed upon British subjects. In my opinion, therefore, Clarke J was right in
Caltex Singapore Pte Ltd v BP Shipping Ltd [1996] 1 Lloyd's Rep 286 to treat a
modern limitation statute (in that case, of Singapore) as a procedural provision,
limiting the remedy rather than the substantive right: see also Seismic Shipping
Inc v Total E&P UK plc (The Western Regent) [2005] 2 Lloyd's Rep 359, 370.
48 There is accordingly in my opinion no English authority to cast any doubt
upon the conclusion of the Australian High Court in Stevens v Head 176 CLR
433 that, for the purposes of the traditional distinction between substance and
procedure which treats remedy as a matter of procedure, all the provisions of
MACA, including limitations on quantum, should be characterised as procedural.
This was also the view of the Court of Appeal in Roerig v Valiant Trawlers Ltd
[2002] 1 WLR 2304. In John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503,
however, the High Court reversed itself, abandoned the traditional rule (at least
for torts committed in Australia) and confined the role of the leges fori of the
Australian states to procedure in the narrow sense of rules "governing or
regulating the mode or conduct of court proceedings": see pp 543-544. This
change was said to be required by constitutional imperatives of Australian
federalism. In a later decision (Regie Nationale des Usines Renault SA v Zhang
(2002) 210 CLR 491, 520, para 76) the court left open the question of whether it
would apply to foreign torts. But the decision in the Pfeiffer case 203 CLR 503
clearly influenced the judgments of the majority in the Court of Appeal in this
case, to which I must now turn.
49 Arden LJ said, at p 1559, para 52 that "the meaning of substance and
procedure for the purposes of section 14 of the 1995 Act must be sought in the
context of the 1995 Act". That, if I may respectfully say so, seems to me plainly
right. But then, instead of putting the 1995 Act into the context of the previous
common law and the proposals of the Law Commission, she approached the
matter in a more abstract way, saying that a reference to the law of the forum
must be "justified by some imperative which, relative to the imperative of applying
the proper law, has priority". Such a reason, she suggested, might be the inability
of the English court to "put itself into the shoes of the foreign court" and adopt
some procedure which was not available in this country. But otherwise, she
thought that the principle adopted in the Pfeiffer case should be applied and
restrictions on the right to recover damages in the foreign law should not be
regarded as procedural.
50 Arden LJ may have been influenced in her approach to the construction of
section 14(3)(b) by her view, expressed earlier in her judgment, at p 1559, para
51, that what she called "the damages principle", i e the rule that the assessment
of damages is governed by the lex fori, was "one of uncertain meaning and
application". So she felt that she was entitled *97 to start on the basis that section
14(3)(b) was, so to speak, written on a clean sheet of paper. Of course there
were peripheral uncertainties and differences of opinion. We have seen that in
Boys v Chaplin [1971] AC 356 Lord Guest and Lord Donovan were willing to give
the concept of procedure wider application than the majority, although, if I may
say so with respect, the majority were in my opinion plainly right. There was also
some uncertainty, largely generated by Dicey's interpretation of Cope v Doherty 4
K & J 367; 2 De G & J 614, about whether a statutory limitation on damages
could be construed as substantive. I could add other possible uncertainties which
have not yet come before the courts. For example, there may be rules of foreign
or domestic law, under which a tort or other wrongful act gives rise to a liability to
pay a conventional sum of money, which make it impossible to separate the
concept of actionable damage from the concept of a remedy for that damage. It
might be more realistic to say that the rule simply lays down the conditions under
which the claimant is entitled to payment of a prescribed sum of money. But I do
not propose to explore this or other hypothetical cases because they do not arise
in this case and, so far as I know, have not arisen in the past.
51 There can however be no doubt about the general rule, stated by Lord
Mackay in the House of Lords debate, that "issues relating to the quantum or
measure of damages" are governed by the lex fori. And this was the rule which
Parliament intended to preserve. Even if there appeared to be more logic in the
principle in Pfeiffer's case (and Dicey & Morris, 13th ed (2000), p 172, supports
Arden LJ on this point) the question is not what the law should be but what
Parliament thought it was in 1995. As Lord Lloyd of Berwick said of a provision in
the Limitation Act 1980 in Lowsley v Forbes (trading as L E Design Services)
[1999] 1 AC 329, 342:
"It is Parliament's understanding of the existing law when enacting the
Limitation Amendment Act 1980 that matters, not what the law is subsequently
shown to have been. As Lord Simon of Glaisdale said in Black-Clawson
International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591, 648: '
Once it is accepted that the purpose of ascertainment of the antecedent defect in
the law is to interpret Parliament's intention, it must follow that it is Parliament's
understanding of that law as evincing such a defect which is relevant, not what
the law is subsequently declared to be.' If common error can make the law, so
can parliamentary error."
52 Sir William Aldous likewise said [2005] 1 WLR 1539, 1566, para 86 that
the term "procedure" in section 14(3)(b) "should be given its natural meaning".
He placed considerable reliance upon John Pfeiffer Pty Ltd v Rogerson 203 CLR
503, despite the express statements in that case that it was, for Australian
reasons, departing from traditional principles of English law. Such a construction
was, he said, supported by Dicey & Morris, which is true, and by the Law
Commission's Report, which in my opinion is not true. The only passage in the
Commission's Report which may be said to support the conclusion reached by
Sir William Aldous (although not his reasoning) is paragraph 3.39, which
reproduces Dicey's comment that "a statutory ceiling on damages" is a question
of substance. But the Law Commission appears to have thought this proposition
could be reconciled *98 with its statement in the previous paragraph (3.38) which
I have already quoted. In my opinion, that paragraph is consistent neither with
the narrow construction of "procedure" adopted by Sir William Aldous nor with a
characterisation of limits on damages as not being procedural in the broader
sense.
53 In my opinion, therefore, Elias J was right to treat the MACA restrictions as
entirely inapplicable. In the circumstances it is unnecessary to decide whether, if
they had been properly characterised as substantive, it was open to the Court of
Appeal to reverse his judgment that it was substantially more appropriate to
apply English law. The hypothesis necessary to raise this question is in my view
somewhat artificial, because most of the reasons why it may be more appropriate
to apply English law are the reasons why the assessment of damages is
traditionally characterised as a matter for the lex fori. I would therefore prefer not
to express a view on this question. In my opinion the appeal should be allowed
and the judgment of Elias J restored.
LORD RODGER OF EARLSFERRY
54 My Lords, in January 2002 the claimant and the defendant were living
together in London. The defendant, who is Australian, travelled to New South
Wales to attend a family wedding. A fortnight later the claimant flew out to join
her. On 3 February near Huskisson, New South Wales, the claimant was a
passenger in a car driven by the defendant when it was involved in an accident.
As a result of the accident the claimant was rendered tetraplegic. He
subsequently commenced the present action for damages for his injuries against
the defendant who was living in England at the time. She admits liability. The
claimant contends that the English court should assess the damages according
to English law, while the defendant contends that the assessment of damages is
regulated by the law of New South Wales which limits the amounts which can be
recovered.
55 Until comparatively recently, any private international law questions in a
case like the present would have been decided according to the common law. A
person who had suffered damage abroad and who wished to bring proceedings
to recover compensation for that damage in the English courts had to show that
his claim, or any particular head of claim, relating to the damage was actionable
both under English law, the lex fori, and under the law of the country where the
injury had been sustained, the lex loci delicti: Phillips v Eyre (1870) LR 6 QB 1. In
Machado v Fontes [1897] 2 QB 231, the Court of Appeal had relaxed the rule to
a certain extent by holding that it was sufficient if the act was wrongful in the
country where it was committed, even though any damage would not have been
actionable in civil proceedings there. In Boys v Chaplin [1971] AC 356 this House
overruled Machado v Fontes [1897] 2 QB 231 and declared that, in general, the
damage or head of damage had indeed to be actionable under the lex loci delicti
as well as under English law. Provided that the claim passed this test, the foreign
law then fell out of the picture and the defendant's liability for the damage or head
of damage was determined in accordance with English law: [1971] AC 356,
385B-386A, per Lord Wilberforce. The remedy to make good the plaintiff's
damage was, however, a matter for the law of the forum. So, in assessing and
awarding damages, an English court would apply English law.
56 *99 When this House restored the double actionability rule to its full rigour
in Boys v Chaplin, there was a somewhat increased risk that the test would
exclude certain claims which it would actually be just to admit. Recognising this,
the House held that, in appropriate cases, a claim or head of claim could proceed
even though it was not actionable under the lex loci delicti. The flexible test for
recognising these situations which Lord Wilberforce formulated came to win
acceptance. In Red Sea Insurance Co Ltd v Bouygues SA [1995] 1 AC 190, the
Privy Council held, conversely, that, where justice required in particular
circumstances, an action could proceed in the courts of the forum on the basis of
the lex loci delicti, even though the damage or head of damage would not be
actionable under the lex fori.
57 In the eyes of their supporters, in this version the common law rules for
determining whether damage or a head of damage was actionable in an English
court displayed a welcome pragmatic flexibility; to their critics, the rules were too
uncertain to provide sure guidance for practitioners. In 1990 in a joint report,
Private International Law: Choice of Law in Tort and Delict, the English and
Scottish Law Commissions sided with the critics and recommended that the
common law rules for determining actionability should be replaced by a statutory
scheme. The commissions confirmed, however, at para 3.38, that "the measure
or quantification of damages... [should be] governed by the lex fori". In due
course Parliament enacted the Private International Law (Miscellaneous
Provisions) Act 1995, Part III of which makes provision for new choice of law
rules in tort and, for Scotland, in delict.
58 The first step which Parliament had to take was to abolish the pre-existing
common law rules of double actionability which were perceived to be causing the
problem. Except for defamation claims, where the common law is preserved by
section 13, Parliament abolished these rules in section 10. Indeed Part III affects
these rules and no others. This is stated expressly in section 14(2): "Nothing in
this Part affects any rules of law (including rules of private international law)
except those abolished by section 10 above." This provision serves to delimit the
scope of the enactment in Part III and means that there is no room for arguing
that the abolition of the rules covered by section 10 must have impliedly effected
a change in some other rule of law. More particularly, it immediately suggests
that Part III does not affect the assessment of damages since that matter was
never governed by the double actionability rules which were abolished by section
10. If that is so, the assessment of damages must continue to be governed by
the lex fori.
59 The abolition of the common law rules was just the first step in the reform.
The next step was to replace them with new rules. That is what Part III is
designed to do. As section 9(1) explains, the rules in Part III are to apply for
choosing the law ("the applicable law") to be used for determining "issues relating
to tort or (for the purposes of the law of Scotland) delict". So Part III does three
things. First, it provides that the English court is to use a particular law (the
applicable law) to determine whether an actionable tort has occurred: section
9(4). In effect, this replaces the double actionability test. But, secondly, section
9(4), read along with subsection (1), goes on to provide that the applicable law is
to be used to determine other "issues *100 relating to tort". Finally, sections 11
and 12 provide the rules by which the applicable law, which is to be used to
determine these issues, is to be chosen. Under section 12 the English court can
separate out various issues relating to the tort and, where appropriate, a different
law is to be used to determine different issues (dépeçage).
60 Where matters are in dispute, the first step will be for the court to use the
rules in sections 11 and 12 to decide what the applicable law is. Rather as, under
Boys v Chaplin [1971] AC 356, there was a general rule of double actionability
which could be disapplied in certain circumstances, so too section 11 gives the
general rule for choosing the applicable law, while section 12 provides for that
general rule to be displaced where it would be substantially more appropriate for
the law of another country to apply. Once the court has chosen the applicable
law or laws in accordance with these sections, the judge will use the chosen
system or systems to determine whether an actionable tort has occurred and any
other issue "relating to [the] tort" which arises. Parliament has not defined "issues
relating to tort", but it has at least indicated certain matters which do not fall
within that category. These are to be found in section 14(3) which provides, inter
alia:
"Without prejudice to the generality of subsection (2) above, nothing in this
Part...
(b) affects any rules of evidence, pleading or practice or authorises questions
of procedure in any proceedings to be determined otherwise than in accordance
with the law of the forum."
This provision reinforces section 14(2) by spelling out three types of rule which
Part III is not to affect and one approach which it is not to authorise. It is not to
affect any rules of evidence, pleading or practice and it is not to authorise a court
to determine "questions of procedure in any proceedings" otherwise than in
accordance with its own law. So, while Part III authorises-indeed requires-an
English court to use the applicable law to determine "issues relating to tort", it
does not authorise the court to use anything other than English law to determine
any "questions of procedure" which arise in the proceedings.
61 Here the defendant argues that under sections 11 and 12 the applicable
law relating to the issue of the assessment of damages is the law of New South
Wales. So the claimant is not entitled to recover any more by way of damages for
his personal injuries than he would be entitled to recover under the Motor
Accidents Compensation Act 1999 ("MACA") of New South Wales. For his part,
the claimant says that questions relating to the assessment of damages are
"questions of procedure" and so, in accordance with section 14(3)(b), the English
court must determine them by using English law. By a majority (Arden LJ and Sir
William Aldous, Waller LJ dissenting), the Court of Appeal upheld the defendant's
contention that the MACA rules should be applied to the assessment of
damages. The result is that the maximum which the claimant could recover by
way of damages for his injuries is substantially less than he would be able to
recover if the judge had to apply English law.
62 The critical question concerns the interpretation of the expression
"questions of procedure" in section 14(3)(b). In the Court of Appeal, [2005] 1
WLR 1539, 1559, para 52, Arden LJ explained how, in her view, the English
court should approach it: *101
"In the context of section 14, a principled approach requires the court to start
from the position that it has already decided that the proper law of the tort is not
the law of the forum, i e that some other law applies to the tort, either because it
is the lex loci delicti or because it is substantially more appropriate than the lex
loci delicti. On this basis, a reference to the law of the forum must be the
exception, and it must be justified by some imperative which, relative to the
imperative of applying the proper law, has priority."
Later, Arden LJ [2005] 1 WLR 1539, 1563, para 66, held that there was "a
guiding principle" that "Once the court has decided that the law of New South
Wales is the proper law of the tort, it is logical, so far as possible, to apply the law
of New South Wales throughout". Adopting this approach, she considered, at p
1562, para 61, that the context of section 14 suggested that "the approach of
Mason CJ in McKain v RW Miller & Co (South Australia) Pty Ltd (1991) 174 CLR
1 that procedure covers matters as to the mode and conduct of trial is the basic
approach of section 14". On that basis the assessment of damages was not a
question of procedure and so was, presumably, to be included among the "issues
in the claim" which section 9(4) directs the court to determine by using the
applicable law.
63 In my respectful view Arden LJ was wrong to see section 9(4) as
containing a guiding principle and section 14(3)(b) as containing an exception
which the court can invoke only where there is some overriding imperative for
doing so.
64 In Part III Parliament did not enact a comprehensive scheme and a
number of exceptions. It simply provided that the law chosen in accordance with
sections 11 and 12 is to be used to determine certain issues, while the law of the
forum is to continue to be used to determine others. The matters where the
United Kingdom courts are to continue to use the law of the forum are spelled out
in section 14(3). In particular, Parliament has decided not to authorise an English
court to use anything other than English law to determine "questions of
procedure". This policy may be criticised as being liable to encourage forum
shopping or on some other ground, but it is the policy of the legislature and, as
such, it is entitled to exactly the same weight and respect as the policy in section
9(4) that certain other issues are to be determined by the law chosen in
accordance with sections 11 and 12. There is accordingly no reason to regard
the rule requiring an English court to use English law to determine questions of
procedure as "the exception", for which some overriding imperative must be
found. On the contrary, the words of section 14(3)(b) should be interpreted and
applied in a straightforward fashion, giving them the meaning which is
appropriate in the context in which they occur.
65 So, does the expression "questions of procedure" in section 14(3)(b)
include questions relating to the assessment of damages? Like Arden LJ, Sir
William Aldous adopted a restrictive interpretation of those words: for him, at p
1566, para 86, "the word 'procedure' in the 1995 Act should be given its natural
meaning namely, the mode or rules used to govern and regulate the conduct of
the court's proceedings". In many contexts something like that might well be
regarded as the appropriate meaning and it might very well not include the
assessment of damages. But here the expression "questions of procedure" is
being used within Part III of a statute on private *102 international law. So it is a
fair assumption that Parliament meant the expression to be understood in the
way that it would be understood in the field of private international law. In fact,
the scheme of Part III would not work on any other basis. In a case like the
present, the English court has to decide whether to characterise the relevant
aspects of the assessment of damages as issues relating to tort, to be governed
by the applicable law, or to regard them as questions of procedure, to be
governed by English law. Given that the characterisation under section 9(2) is
"for the purposes of private international law", in carrying it out, the court must
have regard to the general principles of private international law. To be
consistent, the court must apply the same general approach when considering
the other side of the question, which involves interpreting and applying section
14(3)(b).
66 By the time Parliament legislated in 1995, it was generally understood that,
for the purposes of private international law, some questions relating to damages
were substantive while others were procedural. Questions relating to the
actionability of heads of claim were substantive, while questions as to the
quantification of damages for actionable heads of claim related to the remedy
and so were classified as procedural. So, for instance, Lord Hodson said in Boys
v Chaplin [1971] AC 356, 379:
"I am now, however, persuaded that questions such as whether loss of
earning capacity or pain and suffering are admissible heads of damage must be
questions of substantive law. The law relating to damages is partly procedural
and partly substantive, the actual quantification under the relevant heads being
procedural only."
Lord Wilberforce, at pp 392-393, was somewhat dismissive of an analysis purely
in terms of what he called "the accepted distinction between substance and
procedure", but none the less he too envisaged that certain questions relating to
damages were to be classified as "procedure" and so as a matter for the
application of the lex fori. Similarly, Lord Pearson spoke, at p 394E--F, of
"procedural (or adjectival or non-substantive) law" which would regulate the
recovery of damages. In Mitchell v M'Culloch 1976 SC 1, 7, Lord McDonald
referred to counsel for the pursuer's argument that "procedural matters, including
the measure of damages are determined solely by the lex fori". In Stevens v
Head (1993) 176 CLR 433, 447, Mason CJ summarised the current thinking:
"The law relating to damages is partly procedural and partly substantive.
According to the traditional application of the substance-procedure distinction,
the question whether legislative provisions dealing with awards of damages are
substantive or procedural has been approached by asking whether the provisions
affect the character of the wrong actionable or go only to the measure of
compensation. This approach is consistent with the equation traditionally drawn
between matters of procedure and matters relating to remedies."
67 These references, which could be multiplied, demonstrate that questions
of the quantification or assessment of damages had long been regarded as
"procedural" as opposed to "substantive". I have accordingly no doubt that when
Parliament used the expression "questions of procedure" it *103 was intended to
cover questions relating to the assessment of damages. Indeed, if that were not
so and the assessment of damages were to be regarded as an issue relating to
tort to be determined by reference to the applicable law, Parliament would have
made a major change in this aspect of the law-despite the Law Commissions'
recommendation that the existing state of the law should be preserved.
68 Counsel for the defendant contended, however, that, even if Parliament
had used the expression "questions of procedure" in that way when it passed the
1995 Act, the common law was not set in stone and an "updating construction"
should be given to section 14(3)(b), to take account of developments since 1995.
In particular, the High Court of Australia, which would, in 1995, have accepted
that the assessment of damages was procedural (Stevens v Head 176 CLR 433),
had now changed direction and held, in the words of the majority, that "all
questions about the kinds of damage, or amount of damages that may be
recovered, would... be treated as substantive issues governed by the lex loci
delicti": John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503, 544, para 100. In
making this change, members of the court had regard to the view of La Forest J,
giving the opinion of the Supreme Court of Canada in Tolofson v Jensen [1994] 3
SCR 1022, 1072, that
"the purpose of substantive/procedural classification is to determine which
rules will make the machinery of the forum court run smoothly as distinguished
from those determinative of the rights of both parties."
Counsel for the defendant submitted that the expression "questions of
procedure" in section 14(3)(b) should now be interpreted in a way which took
account of this development. In effect, by adopting the High Court's revised
classification of questions relating to the assessment of damages as matters of
substance, Arden LJ and Sir William Aldous accepted that argument.
69 In my view, however, the argument falls down for a variety of reasons.
This is not a case of the kind envisaged by Lord Wilberforce in Royal College of
Nursing of the United Kingdom v Department of Health and Social Security
[1981] AC 800, 822, where a new state of affairs, or a fresh set of facts bearing
on policy, has come into existence since the 1995 Act was passed and the courts
have to consider whether they fall within the parliamentary intention expressed in
the words of the enactment. Indeed the decision of the Supreme Court of
Canada in Tolofson v Jensen [1994] 3 SCR 1022 antedated the 1995 Act-but
Parliament did not follow its lead. All that the defendant can point to, therefore, is
a change in the way that the High Court of Australia classifies questions about
the quantum of damages for purposes of the common law rule in intra-Australian
cases. As is plain from the judgments in John Pfeiffer Pty Ltd v Rogerson 203
CLR 503, however, their Honours were knowingly altering what had previously
been well settled law. Moreover, they were doing so because they felt impelled
by what they saw as a requirement of the federal nature of the constitution. A
similar consideration influenced the Canadian Supreme Court in Tolofson v
Jensen [1994] 3 SCR 1022. It remains to be seen whether the High Court will
hold that all questions about the kind or amount of damages are to be
determined by the lex loci delicti in international cases: *104 Regie Nationale des
Usines Renault SA v Zhang (2002) 210 CLR 491, 520, para 76. These decisions
of the Canadian and Australian courts, which show how the common law can be
reshaped, may give ammunition, or food for thought, for critics of the policy
adopted by Parliament in the 1995 Act. But they contain nothing which can justify
the House in altering what would otherwise be the appropriate interpretation of
the statute.
70 The passage which Lord Hoffmann has quoted from the Hansard report of
the speech of Lord Mackay of Clashfern LC in reply to the probing amendment in
the name of Lord Howie of Troon, confirms the construction which I would, in any
event, have placed on the words in section 14(3)(b). But more importantly,
perhaps, it shows that Parliament was assured that the provision would prevent
damages being awarded by reference to the law and standards of other
countries. The particular problem raised by Lord Howie related to the high level
of damages in the United States which he was anxious should not be replicated
here. But it would be equally unacceptable if, say, United Kingdom courts had to
award damages according to a statutory scale which, while adequate in another
country because of the relatively low cost of services etc there, would be wholly
inadequate in this country, having regard to the cost of the corresponding items
here. As Parliament was assured by the Lord Chancellor, section 14(3)(b) guards
against such eventualities. The interpretation advocated by the defendant would
undermine the basis on which Parliament legislated.
71 The defendant relies on the provisions of MACA. So the ultimate question
is whether the relevant provisions are to be regarded as procedural or
substantive for the purposes of private international law. If they are procedural,
they are to be disregarded since questions of procedure are to be regulated by
the law of the forum in accordance with section 14(3)(b). If they are substantive,
then they would apply if the law of New South Wales were the applicable law, as
the Court of Appeal held, reversing Elias J.
72 Lord Hoffmann has analysed the passage in Dicey & Morris, The Conflict
of Laws, to the effect that "statutory provisions limiting a defendant's liability are
prima facie substantive; but the true construction of the statute may negative this
view". I respectfully agree with his analysis. In any event, as the passage
recognises, in any given case the answer to the question must depend on the
construction of the relevant provision in the context of the particular statute. In
the present case the defendant relies on various provisions in Chapter 5 of
MACA, headed "Award of damages". Many of them derive from equivalent
provisions in the Motor Accidents Act 1988. The restrictions on the damages
recoverable for non-economic loss under that Act were considered by the High
Court of Australia in Stevens v Head 176 CLR 433. Applying the customary
common law approach in private international law, the High Court classified them
as procedural. That decision is not conclusive of any or all of the matters in
dispute, but it does provide useful guidance from the highest court in the country.
73 Section 122(1) of MACA explains that Chapter 5 applies to, and in respect
of, "an award of damages" relating to death or injury in motor accidents. Section
123 provides that "A court cannot award damages to a person in respect of a
motor accident contrary to this Chapter." While, of course, it may be necessary to
look beneath the surface of a statutory *105 provision to ascertain its nature, the
legislature is here signalling that the provisions in Chapter 5 are directed to what
a New South Wales court can award by way of damages. In other words, prima
facie at least, they are concerned, not with the scope of the defendant's liability
for the victim's injuries as such, but with the remedy which the courts of New
South Wales can give to compensate for those injuries. For purposes of private
international law, prima facie they are procedural in nature.
74 Of course, when it enacted MACA the Parliament of New South Wales
was not concerned with the categories of private international law. So, not
surprisingly, Chapter 5 contains provisions on matters which would traditionally
fall on the substantive side of the line for purposes of private international law.
This is the case, for example, with mitigation of damages in section 136. The
same goes for section 138, on contributory negligence, and section 140, on
volenti non fit iniuria.
75 Nevertheless, in Parts 5.2 and 5.3, dealing respectively with damages for
economic and non-economic loss, the provisions are formulated in a way that
emphasises their nature as directions to the courts of New South Wales. For
instance, where the legislature refers to "an award of damages", it is referring to
something that can only be made by a court. So, under section 125(2), in "an
award of damages" for economic loss, "the court is to disregard" any amount by
which the injured person's weekly earnings would have exceeded AUS$2,500,
subject to indexation. Under section 127(1), "where an award of damages is to
include compensation" for future economic loss, the present value of that future
loss "is to be qualified by adopting the prescribed discount rate"-clearly a
direction to a judge who is going to include this kind of compensation in an award
of damages as to how to go about it. Similarly, under section 134, the maximum
amount "that a court may award" for non-economic loss is now AUS$309,000,
again subject to indexation.
76 Undoubtedly, in practice these and other provisions can be expected to
govern the amounts for which claims are settled outside the courts. But that does
not make them substantive. It merely means that litigants, who know what the
court can and cannot award, will settle their claims accordingly. More particularly,
it does not mean that the provisions are to be regarded as substantive rather
than procedural for purposes of private international law. In that context, the
brocard ubi remedium ibi ius would be an unsafe guiding principle.
77 I would accordingly hold that the provisions of Chapter 5 of MACA on
which the defendant relies relate to the remedy which the courts of New South
Wales can award and are procedural for the purposes of section 14(3)(b) of the
1995 Act. That being so, they fall to be ignored when the English court awards
damages for the claimant's injuries. I recognise that this means that the
defendant's insurers may have to meet a higher claim for damages than would
be the case if the provisions of MACA applied. I recognise also that making a
higher award would conflict with certain of the overall objects set out in section 5
of MACA. But I do not regard that as a compelling consideration since, as
defendant's counsel was careful to acknowledge, the impact on the scheme of
applying a different scale of damages in claims litigated in this country is unlikely
to be anything other than marginal.
78 *106 For these reasons, as well as for those given by Lord Hoffmann, with
whose speech I am in full agreement, I would allow the appeal and hold that the
quantification of damages is to be determined in accordance with English law.
Since all the issues in dispute relate to the quantification of damages, it is
unnecessary to decide which law would be the applicable law for determining
issues relating to tort in accordance with section 9(1)(4) of the 1995 Act.
LORD CARSWELL
79 My Lords, I have had the advantage of reading in draft the opinions
prepared by my noble and learned friends, Lord Hoffmann and Lord Rodger of
Earlsferry. I fully agree with their reasons and conclusions, with one slight
qualification on one aspect of the case, on which I shall add a few words.
80 Your Lordships have found it possible to decide the question of
construction of section 14(3)(b) of the Private International Law (Miscellaneous
Provisions) Act 1995 without recourse to external aids. The claimant's counsel
also relied strongly, however, on the statement made in the House of Lords on
27 March 1995 by Lord Mackay of Clashfern LC set out in para 37 of Lord
Hoffmann's opinion. This was not just an expression of the Government's
intention from a most authoritative source, it was a reassurance to Lord Howie of
Troon that his amendment was not necessary, since issues relating to the
quantum or measure of damages would come within the ambit of the words
"questions of procedure" in section 14(3)(b). As Lord Hoffmann has said (para
37), it is as clear a case for the application of the principle stated in Pepper v Hart
[1993] AC 593 as anyone could hope to find. If the officious bystander had
volunteered his opinion on the point, it could have been nothing short of
conclusive.
81 Pepper v Hart has been out of judicial favour in recent years (no doubt
largely because there were some instances of its over-use, though there have
been some trenchant and irreconcilable critics), and courts have constantly
striven to avoid resorting to it. I do consider, however, that the principle has a
place in statutory interpretation. As Lord Nicholls of Birkenhead remarked in R
(Jackson) v Attorney General [2006] 1 AC 262, 291-292, para 65, it would be
unfortunate if Pepper v Hart [1993] AC 593 were now to be sidelined, as there
are occasions when ministerial statements are useful in practice as an
interpretative aid, perhaps especially as a confirmatory aid. I would simply
remark myself that it would be wilful blindness for courts to deprive themselves of
its assistance in proper cases.
82 The conditions for the application of the Pepper v Hart principle have been
authoritatively stated in a number of cases and do not require repetition. It is
sufficient to refer to the opinion of Lord Browne-Wilkinson in Pepper v Hart [1993]
AC 593, 634-635 and to the several expressions by Lord Nicholls of Birkenhead
in R v Secretary of State for the Environment, Transport and the Regions, Ex p
Spath Holme Ltd [2001] 2 AC 349, 396-399, Wilson v First County Trust Ltd (No
2) [2004] 1 AC 816, 840-841, paras 56-59 and R (Jackson) v Attorney General
[2006] 1 AC 262, 291-292, paras 65-66.
83 I would regard the essential precondition of ambiguity as satisfied in the
present case. I agree with the remarks of Arden LJ in the Court of Appeal (para
58) that "Damages are not naturally regarded as procedure" and Sir *107 William
Aldous (para 86) that the natural meaning of "procedure" is "the mode or rules
used to govern and regulate the conduct of the court's proceedings"; cf La Forest
J in Tolofson v Jensen [1994] 3 SCR 1022, 1072 on the purpose of the
substantive/procedural classification. In the field of private international law,
however, the word bears a special meaning, as your Lordships have indicated. It
is the context which gives it the wider meaning than that which might be regarded
as natural: see para 36 above, per Lord Hoffmann. So long as one could be quite
satisfied that in using the words "questions of procedure" in section 14(3)(b)
Parliament intended that special meaning to be adopted, then the interpretation
is clear. There are strong reasons, as your Lordships have set out, for concluding
that it did intend to adopt the special meaning, and it is quite possible to say that
no ambiguity exists. In my opinion there may, however, be said to be sufficient
possible ambiguity to justify resort to the Lord Chancellor's statement in Hansard
as a confirmatory aid. The other conditions in Pepper v Hart [1993] AC 593 are
obviously satisfied. When one does so, the intention of Parliament is entirely
clear and the correctness of the conclusions reached by your Lordships on the
construction of section 14(3)(b) is fully confirmed.
84 I would allow the appeal and restore the judgment of Elias J.
Appeal allowed.
Order of Elias J restored.
Representation
Solicitors:
Stewarts;
Kennedys.